2019 (4) TMI 1720 - HC - Central Excise

Non-compliance with the pre-deposit - Section 35F of the Central Excise Act, 1944 - HELD THAT - The only relief we can give to the appellant is that provided they deposit 50% of the amount representing 7.5% of the total tax effect in cash with the authority and provided they secure the balance amount by furnishing a bank guarantee to the satisfaction of the tribunal, the tribunal will proceed to hear out the appeal in accordance with law. Appeal disposed off.

Summary

Issues:
1. Appellant aggrieved by the tribunal's order directing pre-deposit of 7.5% of the total tax effect pending appeal.
2. Interpretation of Section 35F of the Central Excise Act, 1944 regarding the pre-deposit requirement.
3. Relief granted to the appellant by the High Court.

Analysis:
1. The appellant challenged the tribunal's order directing a pre-deposit of 7.5% of the total tax effect pending appeal, arguing it was too high and harsh for them. The High Court considered the appellant's grievance and provided relief by modifying the pre-deposit requirement.

2. Section 35F of the Central Excise Act, 1944 mandates a 7.5% deposit pending appeal. The High Court acknowledged this provision but exercised discretion in light of the circumstances. The Court directed the appellant to deposit 50% of the amount representing 7.5% of the total tax effect in cash with the authority. Additionally, the appellant was required to secure the balance amount by furnishing a bank guarantee to the satisfaction of the tribunal.

3. In granting relief to the appellant, the High Court set a condition for compliance. The appellant was given eight weeks to fulfill the order by making the cash deposit and providing the bank guarantee. Once the conditions were met, the tribunal would proceed to hear the appeal in accordance with the law. Consequently, the appeal and the stay application were disposed of as per the High Court's order.